Comparing Job-Order Costing and Activity-Based Costing a....

Comparing Job-Order Costing and Activity-Based Costing a. Why is the cost per unit produced in the conventional job order costing exercise 15.7.1 ($$\$4.75$$) exactly the mean of the costs per unit of the two products in the ABC exercise 15.7.2 ($$\$4.30 and \$5.20$$)? b. What product pricing considerations would you take into account on the basis of the results when calculating manufacturing costs by $\mathrm{ABC}$ ? c. Would a change of the batch size ( 40 in both exercises) imply different results? Is this generally the case in the world of practice? What assumption made in the problem description for the sake of simplicity led to the special case of the two exercises?

Comparing Job-Order Costing and Activity-Based Costing
a. Why is the cost per unit produced in the conventional job order costing exercise 15.7.1 ($$\$4.75$$) exactly the mean of the costs per unit of the two products in the ABC exercise 15.7.2 ($$\$4.30 and \$5.20$$)?
b. What product pricing considerations would you take into account on the basis of the results when calculating manufacturing costs by $\mathrm{ABC}$ ?
c. Would a change of the batch size ( 40 in both exercises) imply different results? Is this generally the case in the world of practice? What assumption made in the problem description for the sake of simplicity led to the special case of the two exercises?

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